Peter Dag & Friends

2/11/11

Thought of the day

Feb. 11 (Bloomberg) -- It took 18 days of pressure from Cairo protesters as the U.S. and the European Union called for change to end the 30-year presidency of Hosni Mubarak, who kept peace with Israel, battled Islamic militants and preserved American interests in the Middle East.

The Arab and Egyptian people are rejoicing. They proved their point. But make no mistake about it. The Arab people have been searching for centuries. The end result is that they are the poorest people in the world. They have resorted even to terrorism to make their point.

All their unrest and revolts are signs of frustrations. Nothing has materially changed for centuries. Nothing will material change in the future. They do not have the institutions and schooling to become westernized.

I am not sure they want to. They will continue their restless life based on strict religious codes, searching.

George Dagnino, PhD

Editor, The Peter Dag Portfolio. Since 1977

Ranked second best gold timer by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site.

2/10/11

My best investment

The US unemployment rate will not return to pre-financial crisis levels for "several years", Federal Reserve chairman Ben Bernanke has said.

Education. When I did not know what to do, when I was confused, uncertain -- when I was young, in other words -- I kept studying, studying, studying.

In my life I never had a problem finding a job. teaching, working for large companies, managing money, owning a business, teaching tennis.

I still do. I try to learn and keep abreast of what is happening. It is not because I am smart. But because it is the only way to keep young and to survive.

Now, for instance, I am working on learning how to develop short seminars to post on my website. It is a challenge. But I will do it. Do I need to do it? No. But I will learn something new from smart people. It will give me a way to share my knowledge about investing and management with other people. It will keep my adrenaline moving, if you know what I mean.

Why do I say this? Because without a strong commitment to personal education, people will always find problems in finding a job. Do not sit on your hands. Do something. Act. Study. Learn. You are never too old. You do not need to be "smart" to learn. Try to be the best in what you like. Your passion. As the Taoists say: when in doubt, do something.

Bernanke cannot create jobs by printing money. It is just plainly ludicrous to even think about it!

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site.

2/9/11

Business cycles, stock prices, and bond yields

Did you notice the pattern? Market down, JNK down, and LQD sharply higher. This is a meaningful pattern. And if you look at the big picture (long term), the business cycle helps explaining this relationship.

1. The stocks market declines.

2, The economy weakens.

3. Commodities decline.

4. High-grade bond yields decline (bond prices rise).

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

2/8/11

PE AND BUSINESS CYCLES

1. BUSINESS SLOWS DOWN
2. THE RATE ON T BILLS DECLINE
3. PE GROWS
4. THE ECONOMY GROWS FASTER
5. THE RATE ON T BILLS RISES
6. PE DECLINES
7. BUSINESS SLOWS DOWN
.........................

PS. THE MARKET IS STRONG WHEN PE EXPANDS.

WHERE DO WE STAND NOW? WHAT IS THE FED FIGHTING?

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Do not fight the Fed

The simplest chart I follow is the one showing the rate of T.bills and the S&P 500.

The graphs are so simple to understand. Instead we fight their implications.

Bottom line? The market peaks after a cyclica increase in the rate of T. bills. The market rises after a cyclical decline in the rate of T. bills.

2/7/11

It has been my point for a long time

The unemployment rate for those with a bachelors' degree or higher is 4.2%. For those with less than a high school diploma is 14.2%.

You can cut and slice the data as much as you want, but the message is loud and clear. Is anybody listening? More details? Click here.

2/6/11

Observations

Transportation issues—do we have a choice?

I enjoy traveling by train in Europe. I was in Venice—for business, of course—and I needed to go to Rome. A 300-mile trip. If I were in the US, I would have chosen to travel by air without hesitation. Renting a car in Italy is expensive. Besides, gasoline prices are outrageous in Europe. The train was the best option.

In just 4 and a half hours I went from Venice to downtown Rome. The trip was fast at close to 100 miles an hour. They are now designing trains that would travel at 350 kilometers per hour (220 miles per hour). The train was very comfortable, clean, and the wide windows allowed me to see the picturesque Italian countryside. The train was flying, cushioned by the latest technologies. And the price was right—less than 100 dollars.

I know what you are thinking—the socialist regimes in Europe are subsidizing trains and most infrastructures. I agree with you. However, we in the US are not much different from the Europeans.

We spend a lot of money on building freeways, which are mostly inadequate. Studies have been made suggesting that increasing road capacity does not alleviate traffic jams. Yet, federal and state governments continue to build new ones and widen old ones.

Gasoline prices are the lowest in the world in order to encourage us to travel by car. In other words, the car industry is heavily subsidized in more ways than one. In the US, cars have been chosen as the main mode of transportation, while trains have been chosen in Europe.

Airline delays are a common fact. When I fly, I leave early, knowing I might miss my connections due to the long, frustrating delays.

Yet, when we talk about trains in the US we become “free market” fanatics. There is no doubt that the government must subsidize this mode of public transportation. However, think about the advantages. At 200 miles per hour one can travel 400 miles in just two hours, downtown to downtown. At this speed and comfort trains would become great competition to cars and airlines. There is no need to wait at the airport for connections to downtown, baggage claims, lost suitcases, etc.

Why don’t we encourage this mode of transportation? My guess is that there is too much pressure on keeping things the way they are. The airline and auto industry enjoy the many benefits of a monopoly with the protection of our government and in the name of “free market”.

(This Observations appeared in the issue of 2/5/01 of The Peter Dag Portfolio)

2/4/11

Who is to blame?

A picture is worth.....(click on the graph to enlarge it -- source: the excellent Calculated Risk).

For more than two years we paid attention to implementing social and community programs. Business and the need of the people were ignored.

The administration, in my humble opinion, is going too slowly on the real issues facing the country -- like employment and business growth.

Is it inexperience? Time and the historians will tell.

2/3/11

I am probably wrong, but ...

Egyptian anti-government protesters have fought back against supporters of President Hosni Mubarak, pushing them out of some streets near Cairo's Tahrir Square which they controlled.

I cannot but think to the people revolting in Europe and Middle-East. They are trying to say something to their leaders. They are trying to make a statement.

Why pay more taxes to bailout the banks? Why should my money be used to correct bad calls made by financial institutions? Why did you allow me to receive pensions that were and are unrealistic? Why is power so concentrated at the top and a disconnect has been created between "them" and "us"?

The rage is erupting in Egypt because they are the most oppressed people. Some of the poorest in the world. Hopefully they will find a peaceful solution to their predicament.

At the end of this painful process a new class of leaders will emerge and the same mistakes will be repeated. Over and over again. This is the lesson of history.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

2/2/11

Interesting graphs

This is an interesting chart from Gluskin Sheff (click on the graph to enlarge it).

The chart shows that turning points in the ISM index are closely related to turning points in the S&P 500.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.